A simple oversight, a lifetime of consequences–How a simple error slashed this woman’s Social Security to just $14
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Social Security serves as a financial lifeline for many Americans, especially those who are disabled or retired. It's a system designed to provide stability and support when it's needed most.
However, as the case of Jessica Melton, a disabled Tennessee resident, illustrates how even a small error can lead to a cascade of problems that threaten this critical safety net. What happened?
Jessica Melton's story is a reminder of the complexities within the Social Security system.
After being overpaid $12,000 by the Social Security Administration (SSA), she found herself in a dire situation.
The SSA's overpayment, a sum that had been accumulating over several years, was due to be repaid, but the repayment process has left Melton with a drastically reduced monthly Supplemental Security Income (SSI) check—plummeting to a mere $14.
Overpayments by the SSA can occur for various reasons, such as changes in a beneficiary's income, living situation, or marital status that are not promptly reported
Sometimes, the fault lies with the SSA itself due to administrative errors. With around a million Americans receiving overpayment notices annually, this issue represents a significant challenge within the system, as it leads to an estimated $23 billion in uncollected overpayments.
In 2022, the SSA received $4.7 billion of overpayments. While the problem isn’t common, it can cause seniors to send back thousands of dollars or more if the issue isn’t caught on time.
For individuals like Melton, who rely on SSI due to disability and are unable to work, the consequences of overpayment notices can be severe.
The SSA's stringent income limits for SSI recipients mean that any miscalculation can lead to a demand for repayment.
In Melton's case, despite her husband's income reportedly staying under the $3,000 monthly limit for married couples, the SSA's calculations deemed it higher, resulting in her ineligibility for SSI payments.
The SSA demanded that she pay back the $12,000 overpayment although she was told at the beginning that it wasn’t her fault. Two weeks later, the SSA sent a letter saying that she was responsible for the error.
"They said they would reevaluate my case every two years. It's been okay up until 2021," Melton told the station. "My husband makes too much money."
To regain the payments, the SSA reduced Melton’s SSI check to a mere $14, which left her with little funds to cover her basic necessities.
"It was dwindling down even one month to only $14. Every time I got paid, I had to give them a payment of an overpayment. Each time my husband got paid, my overpayment went up," Melton stated. “This leaves me paying a debt I don’t owe.”
The SSA provides the option to request an administrative judge review in cases of dispute, but the process can be daunting, especially within the two-month appeal window.
Financial literacy instructors like Alex Beene and Kevin Thompson emphasize the importance of staying vigilant about benefit amounts and reporting any income changes immediately to avoid overpayments.
Source: Dr. Ed Weir, PhD / Youtube.
Boone said, "If you find yourself having to pay back overpayments, you can work with the Social Security Administration on a timeline for repayment or possibly getting that amount reviewed if you feel the mistake was on the administration's end."
For those who do receive an overpayment notice, finance expert Michael Ryan advises making an appeal within 60 days and requesting a detailed breakdown of the overpayment calculation. In some cases, waivers may be available for those who cannot afford to repay the overpayment.
The SSA has taken steps to mitigate the impact of overpayment recovery by reducing default withholding to 10 percent of monthly benefits. To learn more about the yearly overpayments happening in the SSA, listen to this ex-Social Security insider's revelations.
Have you or someone you know faced a similar situation with Social Security overpayments? How did you navigate the process, and what advice would you give to others? Share your experiences and insights in the comments below!
However, as the case of Jessica Melton, a disabled Tennessee resident, illustrates how even a small error can lead to a cascade of problems that threaten this critical safety net. What happened?
Jessica Melton's story is a reminder of the complexities within the Social Security system.
After being overpaid $12,000 by the Social Security Administration (SSA), she found herself in a dire situation.
The SSA's overpayment, a sum that had been accumulating over several years, was due to be repaid, but the repayment process has left Melton with a drastically reduced monthly Supplemental Security Income (SSI) check—plummeting to a mere $14.
Overpayments by the SSA can occur for various reasons, such as changes in a beneficiary's income, living situation, or marital status that are not promptly reported
Jessica Melton, a disabled woman from Tennessee, has been left struggling financially after the Social Security Administration (SSA) demanded she repay $12,000 in overpayments. Image source: Kevin Schneider / Pixabay.
Sometimes, the fault lies with the SSA itself due to administrative errors. With around a million Americans receiving overpayment notices annually, this issue represents a significant challenge within the system, as it leads to an estimated $23 billion in uncollected overpayments.
In 2022, the SSA received $4.7 billion of overpayments. While the problem isn’t common, it can cause seniors to send back thousands of dollars or more if the issue isn’t caught on time.
For individuals like Melton, who rely on SSI due to disability and are unable to work, the consequences of overpayment notices can be severe.
The SSA's stringent income limits for SSI recipients mean that any miscalculation can lead to a demand for repayment.
In Melton's case, despite her husband's income reportedly staying under the $3,000 monthly limit for married couples, the SSA's calculations deemed it higher, resulting in her ineligibility for SSI payments.
The SSA demanded that she pay back the $12,000 overpayment although she was told at the beginning that it wasn’t her fault. Two weeks later, the SSA sent a letter saying that she was responsible for the error.
"They said they would reevaluate my case every two years. It's been okay up until 2021," Melton told the station. "My husband makes too much money."
To regain the payments, the SSA reduced Melton’s SSI check to a mere $14, which left her with little funds to cover her basic necessities.
"It was dwindling down even one month to only $14. Every time I got paid, I had to give them a payment of an overpayment. Each time my husband got paid, my overpayment went up," Melton stated. “This leaves me paying a debt I don’t owe.”
The SSA provides the option to request an administrative judge review in cases of dispute, but the process can be daunting, especially within the two-month appeal window.
Financial literacy instructors like Alex Beene and Kevin Thompson emphasize the importance of staying vigilant about benefit amounts and reporting any income changes immediately to avoid overpayments.
Source: Dr. Ed Weir, PhD / Youtube.
Boone said, "If you find yourself having to pay back overpayments, you can work with the Social Security Administration on a timeline for repayment or possibly getting that amount reviewed if you feel the mistake was on the administration's end."
For those who do receive an overpayment notice, finance expert Michael Ryan advises making an appeal within 60 days and requesting a detailed breakdown of the overpayment calculation. In some cases, waivers may be available for those who cannot afford to repay the overpayment.
The SSA has taken steps to mitigate the impact of overpayment recovery by reducing default withholding to 10 percent of monthly benefits. To learn more about the yearly overpayments happening in the SSA, listen to this ex-Social Security insider's revelations.
Have you or someone you know faced a similar situation with Social Security overpayments? How did you navigate the process, and what advice would you give to others? Share your experiences and insights in the comments below!
